Softcat PLC: PESTLE Analysis of External Business Environment Report

This report presents an analysis of Softcat PLC, an IT infrastructure provider, focusing on its business environment through a PESTLE analysis. The executive summary highlights the company's operations, which emphasize hybrid infrastructure, cybersecurity, digital workplace, and IT intelligence. The report provides an overview of Softcat, including its history, organizational structure, and governance, as well as the significance of PESTLE analysis for strategic decision-making. The PESTLE analysis assesses the impact of political, economic, social, technological, legal, and environmental factors on Softcat's operations, considering the effects of Brexit and COVID-19. Political factors, such as taxation and trade restrictions, are examined alongside economic factors including forex rates and inflation. Social factors like customer preferences and technological advancements are also considered. The report concludes by emphasizing the importance of sustainable operations for increasing stakeholder confidence and brand image, providing valuable insights into the external factors influencing Softcat PLC's performance and strategic planning.

Softcat PLC
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Executive Summary
For this report, Softcat Plc has been selected, effectual IT estate, mainly focuses on
hybrid infrastructure, cyber security, digital workplace and IT intelligence. It can be entailed
from the evaluation that PESTLE helps in getting significant information that vital for decision
making. Along with this, it has been articulated that due to COVID and brexit operations of
Softcat Plc will be influenced to a great extent. It can be stated that for increasing stakeholders
faith and brand image business unit should focus on sustainable operations. Report has included
information about company, importance and analysis of Pestle for Softcat Plc.
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Overview of company including its history.................................................................................3
Information related to organisation structure and the way it is governed...................................4
TASK 2............................................................................................................................................6
Evaluating the importance of carrying out PESTEL analysis for Softcat Plc.............................6
TASK 3............................................................................................................................................8
Analyzing external environment of Softcat Plc using PESTLE..................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12
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INTRODUCTION
Business environment refers to the internal and external factors that directly impacts
company’s operations. Hence, business environmental analysis helps company in developing
competent strategic policy framework and thereby contributes in organizational growth or
success. The present report is based on Softcat Plc which operates in IT industry. It is known as
Marlow-based IT infrastructure provider and listed on recognized stock exchange of London
(FTSE-250) as well. In this, report will provide deeper insight about the organizational structure
and governance aspect of Softcat Plc. Further, it also entails the extent to which PESTLE
analysis assists company in taking suitable decisions about business.
TASK 1
Overview of company including its history
Softcat is public limited company that have established its business operation on 30
March 1993 by Peter Kelly having its headquarter in Marlow, Buckinghamshire. Company have
its operation in nine locations and has been listed on London stock exchange, earning revenue
approximately £991.8 million. It has 1330 employees that are working dedicatedly for growth
and success of organisation so that it can attain its objective. Softcat is leading firm in providing
technology solution and services or outstanding customer’s services to number of people. It has
innovative IT solutions, broad portfolio of IT services and strong partnership with number of
vendors so that it can provide better solutions to wide range of customers (SOFTCAT PLC,
2020). Four areas in which company have set its priority are digital workplace, cyber security,
hybrid infrastructure and IT intelligence. Company overtime have tried to add more and more
services to its portfolio so that it can add new and new customers within organisation and expand
its business operation.
History of Softcat
From 1993-2015, in initial stage of firm it is known by its original name i.e, “Software
catalogue”. Company have shifted its headquarter to Marlow on April 2006 and in 2005 Martin
hellawell had become managing director of firm. Between 1993-2015, company was private
limited company.
2015 to present- In November 2015, it have become public limited firm by offering its share to
general public on London stock exchanged. Company have changed position of Hellawell from
CEO to chairman in 2018 march and finally on 1 April 2018, he was replaced by Graeme Watt.
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Company has make its office outside England in 2016 at Glasgow, Scotland then it further
announced to open first office outside United kingdom in Ireland and Dubia.
Information related to organisation structure and the way it is governed
Organisation structure of Softcat PLC
Organisational structure contributed in distribution of task or activities which need to be
performed by particular individuals so that overall objectives can be achieved. It helps in
eradicating confusion and conflict between employees regarding task which needs to be
completed by specific individuals. Company have definite organisational structure that have
contributed in effective flow of information form senior executives to lower level management
so that particular task or activities can be performed in minimum time frame. Softcat plc has
functional organisational structure that has contributed in effective coordination of particular
work or function performed by each department. Such as CEO is main that handles all
department, human resources, legal, operation and marketing and sales so that overall objectives
of firm can be attained.
Executive and non executive directors
Company have main executive directors named as Graeme watt – CEO of firm, Alastair Wynn-
operations Director, Anthony Cowen – Sales Director, Debra Coady- legal directors, Graham
Charlton- CFO, James Baker- Alliances and marketing director and many more. On other hand,
there are three non executives directors such as Robyn Periss, Karen Slatford and Vin Murria
(About our directors, 2019).
The way it has been governed
Softcat PLC is governed and managed by collective responsibilities of board of directors
of company that have provided appropriate guideline or leaderships regarding the way particular
task can be completed. It collectively management internal operation of business and manage
associated risk (finance and operations) and responsible for approving several changes that need
to be made in organisational structure and capital of firm (Role of the Board, 2019). Thus,
collaborative and collective practices have contributed in completion of task in best possible
manner and increase in profit margin of enterprise each year.
CEO and chairman and respective date when they joined post
Graeme Watt is the CEO, chief executive officer and director of Softcat PLC that
successfully become CEO of firm in 2018, April and feel privileges to work for growth and
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development of IT channel. In March 2006, Martin have joined the company and it have become
chairman in April 2018 after spending number of years i.e., 12 as a managing directors and chief
executive of firm. It has effectively leaded and operate organisation in competitive market so
firm have decided to make chairman of Softcat PLC. Effective governances, organisational
structure of company have contributed in managing performance and productivity of diverse
individuals thus achievements of overall goals of organisation (Our people, 2019). So, all such
were detailed related to past history of company, its structure and the way it is governed so that
main aim can be gained.
Figure 1: Chairman and directors
(Source : About our directors, 2019)
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Figure 1: CEO and management
(Source: Our people, 2019)
TASK 2
Evaluating the importance of carrying out PESTEL analysis for Softcat Plc
PESTLE analysis may be served as framework which is used by business organizations
with the motive to analyze external environmental factors which impact operations. It is
recognized as one of the most effectual strategic planning method which helps in reducing the
level of business threats to a great extent (Perera, 2017). Hence, by applying PESTELE analysis
tool Softcat Plc would become able to understand external market conditions and thereby do
suitable modifications in the existing framework.
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Importance of PESTLE analysis for Softcat Plc is as follows:
Assists in exploiting opportunities:
PESTLE furnishes detailed information about macro environmental aspects. It helps in
assessing the extent to which customer’s preferences and trends are varied over the time period
(Christodoulou and Cullinane, 2019). For example: Through the means of PESTLE analysis
manager of Softcat Plc can understand the level which target market is influencing from specific
social media channel. Hence, as per the analysis Softcat Plc can frame suitable marketing
campaign
Facilitates deeper understanding:
Using PESTLE model Softcat Plc can get information about customer’s preferences,
technological innovation, guidelines pertaining to sustainable operations etc. Further, it also
helps in understanding laws that need to be followed by the firm for ensuring smooth functioning
of operations (Vallati and Grassi, 2019). It also serves information about political and
economical aspects which gives clear indication to the firm about changes that need to be done in
the existing framework.
Cost effectualness:
With regards to environmental scanning, time and effort is recognized as the main aspects
which management team has to devote. Hence, cost effectualness enhances the importance of
PESTLE analysis (Tsangas and et.al., 2019). By using this framework, company can formulate
appropriate strategies for the near future at suitable prices.
Ensures preparedness for threat:
By conducting Pestle analysis Softcat Plc would become able to get information about
threats that arise due to the fluctuations in external market. Softcat Plc operates in IT sector
which is filled with high level of fluctuations in technological aspects. Hence, referring such
strategic analysis management of Softcat Plc can assess technological aspects undertaken by
other organizations. It helps company in taking suitable measure so that competitive advantage
can be gained over rivals.
However, on the critical note PESTLE analysis model has some drawbacks as well which
in turn limits its significance level. As, it is highly time consuming process because factors exist
in macro-environment fluctuate with the very high pace. Due to this, evaluation of factors has to
be done on daily basis which consumes more time of higher management team. It is also
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evaluated on the basis of that for the purpose of decision management team oversimplifies data
gathered through such mode. Hence, while applying this model Softcat Plc should keep in mind
drawbacks as well so that deficiencies can be removed.
TASK 3
Analyzing external environment of Softcat Plc using PESTLE
Political factors:
It is one of the main factor which helps in ascertaining the extent to which political
aspects affect long term profitability of Softcat Plc. Firm is operating at global level in
technological sector so it requires to lay focus on diversifying systematic risks associated with
political environment. In his category, taxation trade restrictions and riles regarding intellectual
property protection has significant impact on business decisions. Company have to follow all
rules and regulation made by government of different countries in order to promote their
business operation across worldwide. Softcat Plc is operating its business in UK that is suffering
from political instability due to brexit and covid-19 so management of firm are unsure about
strategies that they should used so that firm can grow and sustain its business in highly
competitive environment. Some countries to protect local companies have implemented more
complex procedure or increase trade and tariff that have create barrier in expansion of firm
operation in numerous sectors. At the same time free trade policy introduces by government of
United Kingdom have provided opportunity to Softcat Plc to enter into new market to meet
needs of diverse individuals by providing extreme qualitative services to customer.
Economic factor:
This factor mainly includes forex rate, labour market conditions, inflation and recessional
scenario etc. Hence, foe estimating growth level Softcat Plc is required to evaluate all such
aspects in an effectual because economic condition of different countries is varying from each
other. Currently, growing economies are offering wide range of opportunities to the business
organization. Along with this, business performance of Softcat Plc is also affecting to the extent
to which government of host country doing investment in infrastructural aspects. The rationale
behind this, highly developed infrastructural aspects ensure company’s growth and success
(PESTLE analysis of Softcat Plc, 2020). Currently, both unemployment and interest rates are
higher which in turn adversely impact customer’s attitude towards investment. Moreover, due to
pandemic purchasing power of customers are decreased significantly. In addition to this, high
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fluctuation in currency rate is also directly influencing profitability and other operations of
Softcat Plc. Further, unavailability of highly skilled personnel impacts company’s performance
level. Thus, business unit needs to do analysis of human capital available in the market so that
proper planning can be done for upcoming time period.
Social factor:
With regards to Softcat Plc factors such as aging population, migration trends and socio-
economic variables are highly significant in the context of international business operations.
Further, business management practices are also highly affected from income inequality aspects.
Due to less purchasing power now customers purchase products or services from the
organization which offers quality products at lower prices. Thus, income level of customers has
significant implications on the sales and profitability of Softcat Plc. Further, customer’s spending
pattern and behaviour is changing frequently. In addition to this, preferences of customers
towards online shopping are also increasing. Hence, Softcat Plc should focus on offering
services via both tradition and modern medium.
Technological factor:
Currently, decision making of customers can highly be influenced by placing
advertisement on social networking sites. Now, all the companies are placing emphasis on
making e-marketing campaign using social media sites. Moreover, people spend their huge
amount of time on social networking sites such as Facebook, Twitter, Instagram etc. Thus, in
order to remain competitive and enhance collaboration with customer’s management team of
Softcat Plc should focus on developing innovative marketing campaign. Hence, by capitalizing
social media marketing opportunities pertaining customer base and market share can be
increased by the firm. In order to build distinct image at marketplace business organization is
required to go with continuous technological innovation. In this regard, organization should
monitor 5G and aspects in relation to offering positive as well as amazing experience to the
concerned users (PESTLE analysis of Softcat, Plc, 2020). Further, companies operating in UK IT
industry are devoting more attention to research & development aspects for assessing innovative
technologies. Hence, for getting desired level of outcome or success Softcat Plc needs to make
investment in R&D related activities.
Legal factor:
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Softcat Plc is also required to comply with laws and legislation associated with industrial
operations. On the basis of this, while developing policies Softcat Plc needs to consider health
& safety, anti-discriminatory, quality standard, fraudulent marketing campaign, costumer privacy
and security laws etc. If company will not comply with rules enclosed in such laws then
customer satisfaction and talent management & retention will be affected inversely. Along with
this, now competitive firms are also imitating valuable ideas of other. Thus, to protect itself from
such threat Softcat Plc should undertake intellectual properties such as patent, copyright etc. By
this, firm can secure its innovative idea and thereby build as well as sustain competitive edge
over competitors.
Environmental factor:
Current business scenario clearly exhibits that for building distinct image in the mind of
customers companies are focusing on employing unique recycling and waste management
techniques. If firm will not perform its operations or activities in an eco-friendly manner then it
hampers brand image. Along with this, now government also introduces guidelines pertaining to
waste management with which every firm needs to comply with. According to this, at the time of
developing operational plan company should keep in mind environmental aspects and related
norms. In order to encourage eco-friendly operations government is also providing companies
with subsidies. Hence, long term sustainability aspect can be ensured by Softcat Plc through
investing funds in renewable technologies. By this, firm would become able to improve brand
image and thereby customer base and satisfaction as well. Further, changes take place weather
and climatic aspects also have significant impact on operational efficacy of firm.
Hence, at the time of strategic decision making Softcat Plc needs to consider all the above
mentioned details associated with macro-environmental aspects. By taking into account all such
as Softcat can come up with competent framework that makes contribution in organizational
growth.
CONCLUSION
By summing up this report, it can be concluded that PESTLE mode facilitates better
decision making within Softcat Plc by offering information about external environment. It can be
seen in the report that through offering services via online medium and focusing on sustainable
business activities Softcat Plc can attain goals and objectives. Softcat Plc while operating its
business or board of directors while taking in major decision have consider legal laws and ethical
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practices or protect data of customers thus it have contributed in building and retaining strong
brand image in minds and hearts of people. It is also understood from above analysis, that
technology is developing at rapid stage so Softcat Plc have tried to make use of innovative
technology to deliver best services to large number of customer. So, management of firm from
pestle need to promote sustainable use of resources or reduce wastage, number of mistakes so
that maximum value can be delivered to customers in minimum time, cost.
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